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Debt | 12 Months Ended
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Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | Note 6 — Debt Amended Credit Agreement The Company, together with certain direct and indirect subsidiaries, have an outstanding Credit Agreement (the “Credit Agreement”) with a consortium of lenders and Bank of America, N.A., as administrative agent. The Credit Agreement was most recently amended on December 15, 2016 (the “Amended Credit Agreement”). As a result of such amendment, the aggregate principal available for borrowing under the secured revolving credit facility increased from $250,000 to $350,000. All subsidiary borrowers and guarantors participating in the Amended Credit Agreement have entered into a related pledge and security agreement. The security agreement grants a security interest to the lenders in substantially all of the personal property of subsidiaries designated as borrowers to secure their respective obligations under the Amended Credit Agreement, including stock and membership interest of specified subsidiaries (limited to 66% of the stock in case of certain non-U.S. subsidiaries). The Amended Credit Agreement restricts the amount of dividend payments the Company can make to shareholders. As of December 31, 2016, Gentherm had $195,405 available to borrow under the U.S. Revolving Notes, which included outstanding letters of credit totaling $595 as of December 31, 2016. The Amended Credit Agreement requires the Company to maintain a minimum Consolidated Interest Coverage Ratio. The Company must also maintain a Consolidated Leverage Ratio. Definitions for these financial ratios are included in the Amended Credit Agreement. Under the Amended Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Eurocurrency rate (“Eurocurrency Rate Loans”), plus a margin (“Applicable Rate”). The base rate is equal to the highest of the Federal Funds Rate (0.55% at December 31, 2016) plus 0.50%, Bank of America’s prime rate (3.75% at December 31, 2016), or a one month Eurocurrency rate (0.00% at December 31, 2016) plus 1.00%. The Eurocurrency rate for loans denominated in U.S. Dollars is equal to the London Interbank Offered Rate (0.77% at December 31, 2016). All loans denominated in a currency other than the U.S. Dollar must be Eurocurrency Rate Loans. Interest is payable at least quarterly. The Applicable Rate varies based on the Consolidated Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Amended Credit Agreement, the lowest and highest possible Applicable Rate is 1.25% and 2.00%, respectively, for Eurocurrency Rate Loans and 0.25% and 1.00%, respectively, for Base Rate Loans. The Company also has two fixed interest rate loans with the German Investment Corporation (“DEG”), a subsidiary of KfW banking group, a German government-owned development bank. DEG China Loan The first, a loan we used to fund capital investments in China (the “DEG China Loan”), is subject to semi-annual principal payments that began March, 2015 and end September, 2019. Under the terms of the DEG China Loan, the Company must maintain a minimum Debt-to-Equity Ratio, Current Ratio and Debt Service Coverage Ratio, as defined by the DEG China Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Automotive Systems (China) Ltd. Note 6 — Debt (Continued) DEG Vietnam Loan The Company’s second fixed interest rate senior loan agreement with DEG was used to finance the construction and set up of the Vietnam production facility (“DEG Vietnam Loan”). The DEG Vietnam Loan is subject to semi-annual principal payments beginning November, 2017 and ending May, 2023. Under the terms of the DEG Vietnam Loan, the Company must maintain a minimum Currency Ratio, Equity Ratio and Enhanced Equity Ratio, as defined by the DEG Vietnam Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Vietnam Co. Ltd. As of December 31, 2016, we were in compliance with all terms as outlined in the Credit Agreement, DEG China Loan and DEG Vietnam Loan. The following table summarizes the Company’s debt at December 31, 2016.
| Interest Rate |  |  | Principal Balance |
Credit Agreement: |  |  |  |  |  |  |
U.S. Revolving Note (U.S. Dollar Denominations) |  | 2.27 | % |  | $ | 154,000 |
DEG China Loan |  | 4.25 | % |  |  | 2,525 |
DEG Vietnam Loan |  | 5.21 | % |  |  | 15,000 |
Total debt |  |  |  |  | $ | 171,525 |
Current portion |  |  |  |  |  | (2,092 | )
Long-term debt, less current maturities |  |  |  |  | $ | 169,433 |
The following table summarizes the Company’s debt at December 31, 2015.
| Interest Rate |  |  | Principal Balance |
Credit Agreements: |  |  |  |  |  |  |
U.S. Term Loan |  | 2.11 | % |  | $ | 46,875 |
Europe Term Loan |  | 1.50 | % |  |  | 20,369 |
U.S. Revolving Note (U.S. Dollar Denominations) |  | 1.92 | % |  |  | 12,000 |
DEG China Loan |  | 4.25 | % |  |  | 3,497 |
DEG Vietnam Loan |  | 5.21 | % |  |  | 15,000 |
Total debt |  |  |  |  | $ | 97,741 |
Current portion |  |  |  |  |  | (4,909 | )
Long-term debt, less current maturities |  |  |  |  | $ | 92,832 |
The scheduled principal maturities of our debt as of December 31, 2016 is as follows:
Year |  | U.S. Revolving Note |  |  | DEG China Loan |  |  | DEG Vietnam Loan |  |  | Total |
2017 |  | $ | — |  |  | $ | 842 |  |  | $ | 1,250 |  |  | $ | 2,092 |
2018 |  |  | — |  |  |  | 842 |  |  |  | 2,500 |  |  |  | 3,342 |
2019 |  |  | — |  |  |  | 841 |  |  |  | 2,500 |  |  |  | 3,341 |
2020 |  |  | — |  |  |  | — |  |  |  | 2,500 |  |  |  | 2,500 |
2021 |  |  | 154,000 |  |  |  | — |  |  |  | 2,500 |  |  |  | 156,500 |
Thereafter |  |  | — |  |  |  | — |  |  |  | 3,750 |  |  |  | 3,750 |
Total |  | $ | 154,000 |  |  | $ | 2,525 |  |  | $ | 15,000 |  |  | $ | 171,525 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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